Monday, June 18, 2012

More Homebuying Tips From Dad

Shop before you take the first loan you're offered

Dad knows that when it comes to money, you never take the first offer. If nothing else, you need to know whether you can cut a better deal.
For many buyers, shopping smart for a home means haggling over the home price and seller concessions. Some buyers miss the opportunity to shop for the best terms on the loan.
Buyers definitely need to loan-shop more.

It's always a good idea to make sure that you're checking a number of sources. The mistake people make today is they are busy, and may call one or two places on a referral.
It makes sense to talk to not only several lenders, but different types of lenders -- local lenders, national lenders and mortgage brokers (who will shop the loan to a number of sources).

Don't borrow every penny you're qualified for

Dad knew that you should hold a little money in reserve.
For too many of today's homebuyers, their target price is 100 percent of whatever they can borrow, plus their down payment.
But smart money says don't take it to the max with that mortgage. Whatever the bank will loan you, take 20 percent less. It's a buffer for you. It gives you the ability to be in a home and not be pushed to the very limit of what you're capable of right now.
And besides, wouldn't it be nice to live in a home you can "comfortably afford, and build up a reserve of savings, too?
So look for a house that you love -- and meets your needs -- that you can also pay off easily, Corbett says.
Another piece of Dad wisdom: Opt for a stable, straightforward fixed-rate mortgage. You want to know what your mortgage is today, and you want to know what it is going to be 10 years from now.

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